Morgan Stanley cuts Brent oil forecasts but says selloff has overshot physical reality

Commodity
โดย TheStreet·Read original
Summary · why it matters

Morgan Stanley has lowered its Brent crude price forecasts for the rest of 2026, trimming its third-quarter estimate to $90 per barrel from $100 and its fourth-quarter view to $80 from $95, while arguing that the recent 29% plunge in WTI has moved ahead of actual supply disruptions. The bank’s oil strategist Martijn Rats expects only 50% of disrupted production to return by September and 80% by December, leaving a global deficit of about 3.4 million barrels per day in the third quarter. Morgan Stanley also notes that equity valuations for oil producers are discounting a WTI price of roughly $66 per barrel, well below the 12-month strip of around $75, and that the bank’s own 2026 WTI price deck stands at $88.24. The note identifies high US exports and low Chinese imports as structural factors capping upside, while highlighting that global strategic petroleum reserve releases are set to drop sharply from 2.5 million barrels per day to 0.7 million in July and August. The bank maintains Overweight ratings on several major and E&P names, viewing the pullback as a differentiated opportunity.

Impact on stocks 13

Energy▲ · 9 stocks
APA Corporation
APA
▲ PositiveCapitalrelevance

Morgan Stanley maintains Overweight rating on APA, viewing pullback as opportunity; bank's price deck above strip suggests undervaluation.

Chord Energy Corp
CHRD
▲ PositiveCapitalrelevance

Morgan Stanley maintains Overweight rating on Chord Energy, viewing pullback as opportunity; bank's price deck above strip suggests undervaluation.

ConocoPhillips
COP
▲ PositiveCapitalrelevance

Morgan Stanley maintains Overweight rating on ConocoPhillips, viewing pullback as opportunity; bank's price deck above strip suggests undervaluation.

Chevron Corp
CVX
▲ PositiveCapitalrelevance

Morgan Stanley maintains Overweight rating on Chevron, viewing pullback as opportunity; bank's price deck above strip suggests undervaluation.

Devon Energy Corporation
DVN
▲ PositiveCapitalrelevance

Morgan Stanley maintains Overweight rating on Devon Energy, viewing pullback as opportunity; bank's price deck above strip suggests undervaluation.

Diamondback Energy Inc
FANG
▲ PositiveCapitalrelevance

Morgan Stanley maintains Overweight rating on E&P names, viewing pullback as opportunity.

Murphy Oil Corporation
MUR
▲ PositiveCapitalrelevance

Morgan Stanley maintains Overweight rating on E&P names, viewing pullback as opportunity.

Northern Oil & Gas Inc
NOG
▲ PositiveCapitalrelevance

Morgan Stanley maintains Overweight rating on E&P names, viewing pullback as opportunity.

Energy Transition & Power Demand▲ · 3 stocks
Exxon Mobil Corp
XOM
▲ PositiveCapitalrelevance

Morgan Stanley maintains Overweight rating on Exxon, viewing pullback as differentiated opportunity, and notes equity valuations discount low WTI price.

EQT Corporation
EQT
▲ PositiveCapitalrelevance

Morgan Stanley maintains Overweight rating on E&P names, viewing pullback as opportunity.

Expand Energy Corporation
EXE
▲ PositiveCapitalrelevance

Morgan Stanley maintains Overweight rating on E&P names, viewing pullback as opportunity.

Financials▲ · 1 stocks
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